Chapter Nine: Competitive Markets 9.1 Market Structure and Firm Behaviour Market structure: all features of a market that affect the behaviour and performance of firms in that market‚ such as the number and size of sellers‚ the extent of knowledge about one another’s actions‚ the degree of freedom of entry‚ and the degree of product differentiation. Competitive Market Structure Market power: the ability of a firm to influence the price of a product or the terms under which it is sold. The
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Forecasting Models: Associative and Time Series Forecasting involves using past data to generate a number‚ set of numbers‚ or scenario that corresponds to a future occurrence. It is absolutely essential to short-range and long-range planning. Time Series and Associative models are both quantitative forecast techniques are more objective than qualitative techniques such as the Delphi Technique and market research. Time Series Models Based on the assumption that history will repeat itself‚
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Executive Summary Dumitri Mironescu is the owner of a limousine company in Las Vegas which currently consists of 17 vehicles. During the year of 2012‚ Dumitru decided that it was time to replace three of the company’s 17 vehicles. In addition‚ Dumitru wanted to add two new vehicles to his fleet of limousines. Dumitru submitted a business plan to the bank to finance his purchases. After reviewing his business plan‚ the bank was not comfortable with the company’s revenue forecast and needed further
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ECONOMIES OF SCALE AND ECONOMIES OF SCOPE Economies of scale are reductions in average costs attributable to production volume increases. They typically are defined in relation to firms‚ which may seek to achieve economies of scale by becoming large or even dominant producers of a particular type of product or service. A distinction can be made between internal and external economies of scales. Internal economies of scale occur when a firm reduces costs by increasing production. External economies
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Question 1: (a) Suppose the income elasticity of demand for pre-recorded music compact disks is +5 and the income elasticity of demand for a cabinet maker’s work is +0.5. Compare the impact on pre-recorded music compact disks and the cabinet maker’s work of a recession that reduces consumer incomes by 10 per cent. (2 marks) (b) How might you determine whether the pre-recorded music compact discs and MP3 music players are in competition with each other? (2 marks) (c) Interpret the
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case the banana-growing industry is a perfect competition market. 2. Explain and illustrate‚ what the likely short-run effect f the cyclone is on the cost curves of a bananas growing firm in the cyclone-affected region? In the short run‚ both average total cost (ATC) and marginal cost (MC) will increase. Based on the law of diminishing marginal returns‚ when products expand‚ the return of per unit product is decreasing. On the on the other hand both MC and ATC are increasing. The examples in this
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950 1013 907 2005 1160 960 1025 1136 980 2006 1200 1032 1112 1158 1034 2007 1150 1087 1170 1196 1084 2008 1270 1137 1170 1155 1104 2009 1290 1186 1207 1259 1154 2010 x 1214 1236 1287 1195 B) Five-year moving average = 141.9 Three-year moving average = 78.6 Exponential smoothing (w = .9) = 45.7 Exponential smoothing (w = .3) = 110.9 C) I would use the exponential smoothing w=.9 because of the trending factor 6) A) In 2010 = 11450 units B) Sales would go from 11450 to
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for the reasons that initially come to mind (Coontz 33). This piece discusses how economic improvement and the stability of the average family are very appealing to those who look back in nostalgia. The whole nation felt as if there was an overall improvement in the quality of life from the previous decade‚ which in turn brought about a sense of optimism in the average American home. Coontz explains‚ “What most people really feel nostalgic about has little to do with internal structure of the 1950s
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Forecasting Forecast can help managers by reducing some of the uncertainty‚ thereby enabling them to develop more meaningful plans than they might otherwise. A forecast is a statement about the future. Features common to all forecasts 1. The same underlying causal system that existed in the past will continue to exist in the future. 2. Forecasts are rarely perfect; actual results usually differ from predicted values. 3. Forecasts for groups of items tend to be more accurate than forecasts
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automobile sales in the US for the month of March 2012. The prediction is to take into account the historic data (provided) and current marketing environment. At first‚ two approaches of the analytical (quantitative) method were used – moving average and exponential smoothing. The objective of doing so was to get an idea of the prediction based on historic data only. Once that was done‚ the marketing environment was taken into consideration - to see how it would effect the predictions made by
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